The decision to buy a vacation property is a personal one, with many factors to consider. Financial Samurai, a renowned financial expert, shares his experience and advice on the matter. In a recent article, he discusses the pros and cons of owning a vacation property, particularly in relation to having children.
Financial Samurai recounts his own experience of buying a vacation property in Palisades Lake Tahoe in 2007, just before the property market crashed during the global financial crisis. Despite getting a discount on the property, its value continued to decline, leading him to question the investment.
He emphasizes that owning a vacation property is a luxury expense that may not always be a wise financial decision. However, he highlights the value of a vacation property increasing after having children. With more people to enjoy the property, costs can be spread out, and the property can provide a stable second home for building lifelong memories.
Financial Samurai advises waiting until your youngest child is at least three years old before buying a vacation property. He suggests viewing it primarily as a lifestyle decision rather than an investment. For those unsure about the number of children they will have, waiting until the first child turns five can be a compromise.
Overall, Financial Samurai encourages readers to consider their personal circumstances and priorities before investing in a vacation property. He also suggests exploring alternative real estate investment options, such as passive real estate investments through platforms like Fundrise, for potentially better returns.